We use cookies to customise content for your subscription and for analytics.If you continue to browse Lexology, we will assume that you are happy to receive all our cookies. For further information please read our Cookie Policy.

Garford's threat of patent infringement proceedings was unjustified against DSI

On 28 February 2013, Justice Yates handed down his decision finding that Garford had made unjustified threats of patent infringement against DSI. His Honour found that the threats were unjustified because claims of the Garford patent in issue were invalid for secret use, lack of novelty and obviousness. Justice Yates also held that had the claims been valid, DSI would have infringed the Garford patent. On 28 March 2013, his Honour made orders in the proceeding including declarations and an injunction against Garford in relation to threats of infringement and ordered that Garford pay DSI's costs of the proceeding. The decision highlights the importance of ensuring that a patent's validity can be defended before threats of infringement are made.

DSI issued the proceedings for unjustified threats of infringement

Garford threatened to sue DSI for infringement of its patent directed to an apparatus and method for manufacturing bulbed cable bolts, being a type of rock anchor used to stabilise bore holes in mines and rock tunnels. DSI then commenced the proceeding, seeking relief for unjustified threats of infringement. Garford cross-claimed for infringement. DSI denied infringement and alleged that the relevant claims were, in any event, invalid and liable to be revoked.

The unjustified threats provision

Under s128(1) of the Patents Act 1990 (Cth), when a person makes threats of infringement proceedings, an aggrieved person can bring an action seeking a declaration that the threats are unjustifiable, an injunction to stop the threats and damages for loss suffered as a result of the threats.

For a communication to be a threat under s128(1), it must be shown that a reasonable person would understand that the person making the threat intends to bring infringement proceedings. In this case, Garford accepted that it had threatened patent infringement proceedings of the Act.

Garford's secret use of the claimed invention

Justice Yates found that claims 12 to 14 of the patent, claiming a method for manufacturing the bulbed cable, were invalid because Garford had "secretly used" the claimed invention within the meaning of s18(1)(d) of the Act. His Honour noted that "secret use" under s18(1)(d) requires the patentee to have reaped a commercial benefit1 . In relation to one apparatus used by Garford before the priority date, his Honour held that the use had been a trial only, notwithstanding that the inventor had later sold the bulbed cable produced during the trial. His Honour stated that the use was not denied the character of a trial simply because the fruits of the trial were later turned to account. However, in relation to another early apparatus used by Garford, Justice Yates found that the use had been commercial use and it fell within the method claims 12 to 14 of the patent

Lack of novelty of the claimed invention

DSI relied on 4 published patent specifications as prior art citations for its challenge to the novelty of the claimed invention. Justice Yates rejected each of the novelty citations as lacking one or more features of the claims, other than one specification (referred to as the "IRF Application") which was raised as a "whole of contents" citation.

A "whole of contents" objection is an allegation of lack of novelty based on a patent specification published after the priority date, but which contains information which, if it were the subject of a claim of the prior art specification, would have a priority date before the priority date of the claim under consideration.

To test whether the information in the IRF Application anticipated the relevant claims, DSI prepared a set of notional claims for his Honour's consideration (following the reasoning of Emmett J in E I Du Pont de Nemours and Co v ICI Chemicals and Polymers Ltd (2005) 66 IPR 462). Garford submitted that the notional claims were not fairly based on the IRF Application but this submission was rejected by his Honour.

Justice Yates held that the IRF Application disclosed the steps in one the method claims of the Garford patent (claim 12).

Lack of inventive step

Justice Yates found that claims 1 and 5 to 14 lacked an inventive step as they were directed to an apparatus and method which was within the ordinary perception and competence of the person skilled in the art. His Honour found that the apparatus was used to make a commonly known product (being bulbed cable) and the claims were no more than an assemblage of functionally described components which were selected to fulfil well-known and well-understood processing steps.

His Honour rejected Garford's evidence that there were secondary indicia, including commercial success, that the invention was not obvious. His Honour noted that there may be numerous reasons for the increasing success of bulbed cable as a product, and this did not necessarily reflect the commercial success of the claimed apparatus and method for producing bulbed cable.

Other grounds of invalidity - rejected

Justice Yates rejected DSI's allegations that claims of the Garford patent were also invalid for not claiming a manner of manufacture, and for insufficiency and inutility.

The DSI apparatus would have infringed the Garford claims

Justice Yates also found that, had the claims of the Garford patent been valid, they would have been infringed by DSI's apparatus for manufacturing bulbed cable bolts. One of the arguments raised by DSI was that even if its apparatus had the features of the Garford claims, there was no infringement because its apparatus was a "new and different combination" compared with how the preferred embodiment was said to operate. DSI relied on Fresenius Medical Care Australia Pty Ltd v Gambro Pty Ltd (2005) 67 IPR 230 where the Full Court referred to Clark v Adie and said "when considering infringement of a claim to a combination, a relevant question is whether the alleged infringement is the same in substance and effect or is a substantially new or different combination". Justice Yates found that this was a misplaced attempt to rely on the "pith and marrow" doctrine and held that the only test was whether DSI's apparatus possessed the essential features of the claims. This test was answered in the affirmative and it was irrelevant that the DSI apparatus had features which distinguished it from the preferred embodiment described in the patent

Lessons for patent owners

This case highlights the risk that a party threatened with patent infringement proceedings may take pre-emptive action and establish that the relevant claims of the patent are invalid and hence the threats were unjustifiable. Before making any demands that could reasonably be interpreted as threats of proceedings, a patentee should therefore carefully assess the validity of the patent and be willing and able to defend its validity if pre-emptive proceedings are comme

To view all formatting for this article (eg, tables, footnotes), please access the original here.

Compare jurisdictions: Litigation: Enforcement of Foreign Judgments

" The newsfeeds are very useful, easy to read and well written. They allow me to stay current with all the latest news and analysis. The précis give a clear and concise overview of the articles in each email and help me to decide which articles will be of greatest use."